Correlation Between Avient Corp and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both Avient Corp and Minerals Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Avient Corp and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Minerals Technologies, you can compare the effects of market volatilities on Avient Corp and Minerals Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Avient Corp with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Minerals Technologies.
Diversification Opportunities for Avient Corp and Minerals Technologies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avient and Minerals is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and Avient Corp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Avient Corp are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of Avient Corp i.e., Avient Corp and Minerals Technologies go up and down completely randomly.
Pair Corralation between Avient Corp and Minerals Technologies
Given the investment horizon of 90 days Avient Corp is expected to generate 1.15 times more return on investment than Minerals Technologies. However, Avient Corp is 1.15 times more volatile than Minerals Technologies. It trades about 0.1 of its potential returns per unit of risk. Minerals Technologies is currently generating about 0.07 per unit of risk. If you would invest 3,465 in Avient Corp on August 27, 2024 and sell it today you would earn a total of 1,763 from holding Avient Corp or generate 50.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Minerals Technologies
Performance |
| Timeline |
| Avient Corp |
| Minerals Technologies |
Avient Corp and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Minerals Technologies
The main advantage of trading using opposite Avient Corp and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp position performs unexpectedly, Minerals Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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